Case 2:13-bk NB Doc 26 Filed 02/15/13 Entered 02/15/13 10:13:59 Desc Main Document Page 1 of 13

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3 Main Document Page of 0 Jack A. Raisner René S. Roupinian OUTTEN & GOLDEN LLP Park Avenue, th Floor New York, New York 0 Tel.: () -00 and Scott E. Blakeley (State Bar No. ) seb@blakeleyllp.com Ronald A. Clifford (State Bar No. ) RClifford@blakeleyllp.com BLAKELEY & BLAKELEY LLP Park Plaza, Suite 00 Irvine, California Telephone: () 0-0 Facsimile: () 0-0 Counsel for Plaintiff and the Putative Class In re RHYTHM AND HUES, INC., Debtor. ANTHONY BARCELO, on behalf of himself and all others similarly situated, v. Plaintiff, RHYTHM AND HUES, INC., a/k/a RHYTHM AND HUES STUDIOS INC.; a/k/a RHYTHM & HUES STUDIOS, INC.; a/k/a RHYTHM & HUES INC. Defendants. UNITED STATES BANKRUPTCY COURT CENTRAL DISTRICT OF CALIFORNIA LOS ANGELES DIVISION Case No. :-bk--nb (Chapter ) Adv. No. CLASS ACTION COMPLAINT VIOLATION OF WARN ACT, CALIFORNIA WARN ACT, AND and Not admitted to the Bar of the U.S. District Court C.D. Calif. Applications for admission pro hac vice to be filed.

4 Main Document Page of 0 Plaintiff ANTHONY BARCELO ( Plaintiff ) alleges on his own behalf and on behalf of the class of those similarly situated as follows: JURISDICTION AND VENUE. This Court has jurisdiction over this adversary pursuant to U.S.C.,, and U.S.C. (a)().. This is a core proceeding pursuant to U.S.C. (b)()(a), (B) and (O).. The Debtors did business in this district.. Venue in this Court is proper pursuant to U.S.C. (a)() and Bankruptcy Code 0. NATURE OF THE ACTION. The Plaintiff brings this action on his own behalf, and on behalf of other similarly situated former employees who worked for Defendant and who were terminated without cause, as part of, or as the result of, mass layoffs or plant closings ordered by Defendant on or about February, 0, and within thirty (0) days of that date, and who were not provided 0 days advance written notice of their terminations by Defendant, as required by the Worker Adjustment and Retraining Notification Act ( WARN Act ), U.S.C. et seq., and the California Labor Code 00 et seq. ( CAL WARN Act ) (collectively with federal and California statutes, the WARN Acts ). They were not paid their full accrued paid time off under California Labor Code 0 et seq.. Plaintiff and all similarly situated employees seek to recover 0 days wages benefits, pursuant to U.S.C., and the California Labor Code, from Defendant. Plaintiff and all similarly situated employees seek to recover 0 days wages benefits, pursuant to U.S.C., from Defendant. Plaintiff s claim, as well as the claims of all similarly situated employees, is entitled to partial administrative expense status pursuant to the United States Bankruptcy Code 0 (b)()(a) and partial, or alternatively, full priority status, under U.S.C. 0(a)() and (), up to the $,.00 priority cap, with the balance, if any, being a general unsecured claim.

5 Main Document Page of THE PARTIES 0 Plaintiff. Plaintiff Anthony Barcelo was employed by Defendant as a Compositing Technical Director and worked at or reported to the Defendant s headquarters facility located at 0 East Grand Avenue, El Segundo, California (the El Segundo Facility, which is a facility as that term is defined by the WARN Acts) until his termination on or about February, 0. Defendant. Upon information and belief at all relevant times, Defendant maintained and operated its business at the El Segundo Facility and maintained and operated additional facilities, as that term is defined by the WARN Acts (collectively the Facilities ).. Upon information and belief and at all relevant times, Rhythm And Hues, Inc. ( Rhythm And Hues ) is a California corporation duly organized under the laws of the State of California, and employed the Plaintiff and all similarly-situated employees, who worked at or reported to one of its Facilities.. Until on or about February, 0, the Plaintiff and all similarly situated employees were employed by Defendant and worked at or reported to its El Segundo Facility and other facilities. employees.. Upon information and belief, Defendant made the decision to terminate the. On or about February, 0, Defendant ordered the mass layoffs of its employees.. Upon information and belief, the Defendant terminated approximately employees at its El Segundo Facility on or within 0 days of February, 0.. On February, 0, Defendant Rhythm And Hues, Inc. filed voluntary petition for relief under Chapter of Title of the United States Bankruptcy Code. FEDERAL WARN ACT CLASS ALLEGATIONS. Plaintiff brings the First Claim for Relief for violation of U.S.C. et seq., on his own behalf and on behalf of all other similarly situated former employees, pursuant to U.S.C. (a)() and Federal Rules of Civil Procedure, Rule (a) and (b), who worked at or reported to

6 Main Document Page of one of Defendant s Facilities and were terminated without cause on or about February, 0 and within 0 days of that date, or were terminated without cause as the reasonably foreseeable consequence of the mass layoffs and/or plant closings ordered by Defendant on or about February, 0, and who are affected employees, within the meaning of U.S.C. (a)() (the WARN Class ).. The persons in the WARN Class identified above ( WARN Class Members ) are so numerous that joinder of all members is impracticable. Although the precise number of such persons is unknown, it is estimated to equal or exceed, and the facts on which the calculation of that number can be based are presently within the sole control of Defendant.. On information and belief, the identity of the members of the class and the recent residence address of each of the WARN Class Members is contained in the books and records of Defendant.. On information and belief, the rate of pay and benefits that were being paid by Defendant to each WARN Class Member at the time of his/her termination is contained in the books and records of the Defendant.. Common questions of law and fact exist as to members of the WARN Class, including, but not limited to, the following: 0 (a) (b) whether the members of the WARN Class were employees of the Defendant who worked at or reported to Defendant s Facilities; whether Defendant, unlawfully terminated the employment of the members of the WARN Class without cause on their part and without giving them 0 days advance written notice in violation of the WARN Acts; and (c) whether Defendant unlawfully failed to pay the WARN Class members 0 days wages and benefits as required by the WARN Acts. 0. The Plaintiff s claim is typical of those of the WARN Class. The Plaintiff, like other WARN Class members, worked at or reported to one of Defendant s Facilities and was terminated without cause on or about February, 0, due to the mass layoffs and/or plant closings ordered by Defendant.

7 Main Document Page of 0. The Plaintiff will fairly and adequately protect the interests of the WARN Class. The Plaintiff has retained counsel competent and experience in complex class actions, including the WARN Act and employment litigation.. Class certification of these claims is appropriate under Fed.R. Civ.P. (b)() because questions of law and fact common to the WARN Class predominate over any questions affecting only individual members of the WARN Class, and because a class action superior to other available methods for the fair and efficient adjudication of this litigation particularly in the context of WARN Act litigation, where individual plaintiffs may lack the financial resources to vigorously prosecute a lawsuit in federal court against a corporate defendant, and damages suffered by individual WARN Class members are small compared to the expense and burden of individual prosecution of this litigation.. Concentrating all the potential litigation concerning the WARN Act rights of the members of the Class in this Court will obviate the need for unduly duplicative litigation that might result in inconsistent judgments, will conserve the judicial resources and the resources of the parties and is the most efficient means of resolving the WARN Act rights of all the members of the Class.. Plaintiff intends to send notice to all members of the WARN Class to the extent required by Rule. CALIFORNIA WARN ACT CLASS ALLEGATIONS. The Class Plaintiff brings the Second Claim for Relief for violation of California Labor Code 0 on behalf of himself and a class of similarly situated persons pursuant to Labor Code 0 and Federal Rules of Civil Procedure, Rule (a) and (b), who worked at or reported to Defendant s El Segundo, California Facility and were terminated without cause on or about February, 0, and within thirty (0) days of that date and thereafter (the CAL WARN Class ).. The persons in the CAL WARN Class identified above ( CAL WARN Class Members ) are so numerous that joinder of all members is impracticable. Although the precise number of such persons is unknown, the facts on which the calculation of that number can be based are presently within the sole control of Defendant.. On information and belief, the identity of the members of the class and the recent

8 Main Document Page of residence address of each of the CAL WARN Class Members is contained in the books and records of Defendant.. On information and belief, the rate of pay and benefits that were being paid by Defendant to each CAL WARN Class Member at the time of his/her termination is contained in the books and records of the Defendant.. Common questions of law and fact exist as to members of the CAL WARN Class, including, but not limited to, the following: (a) (b) (c) whether the members of the CAL WARN Class were employees of the Defendant who worked in a covered site of employment of Defendant; and whether Defendant unlawfully terminated the employment of the members of the CAL WARN Class without cause on their part and without giving them 0 days advance written notice in violation of the CAL WARN Act; and whether Defendant unlawfully failed to pay the CAL WARN Class members 0 days wages and benefits as required by the CAL WARN Act The Plaintiff s claims are typical of those of the CAL WARN Class. The Plaintiff worked at or reported to one of Defendant s Facilities and was terminated on or about February, 0, and within thirty (0) days of that date and thereafter, due to the closure of the El Segundo, California Facility ordered by Defendant.. The Plaintiff will fairly and adequately protect the interests of the CAL WARN Class. The Plaintiff has retained counsel competent and experienced in complex class actions on behalf of employees, including the CAL WARN Act, the federal WARN Act, other similar state laws, and employment litigation. / / / / / / / / /

9 Main Document Page of 0. Class certification of these Claims is appropriate under Fed. R. Civ. P. (b)() because questions of law and fact common to the CAL WARN Class predominate over any questions affecting only individual members of the CAL WARN Class, and because a class action superior to other available methods for the fair and efficient adjudication of this litigation particularly in the context of CAL WARN Class Act litigation, where individual plaintiffs may lack the financial resources to vigorously prosecute a lawsuit in federal court against a corporate defendant, and damages suffered by individual CAL WARN Class members are small compared to the expense and burden of individual prosecution of this litigation.. Concentrating all the potential litigation concerning the CAL WARN Act rights of the members of the Class in this Court will obviate the need for unduly duplicative litigation that might result in inconsistent judgments, will conserve the judicial resources and the resources of the parties and is the most efficient means of resolving the CAL WARN Act rights of all the members of the CAL WARN Class.. The Class Plaintiff intends to send notice to all members of the CAL WARN Class to the extent required by Rule. paragraphs. CLAIM FOR RELIEF Federal WARN Act Cause of Action. Plaintiff realleges and incorporates by reference all allegations in all preceding. At all relevant times, Defendant employed more than 0 employees who in the aggregate worked at least,000 hours per week, exclusive of hours of overtime, within the United States.. At all relevant times, Defendant was an employer, as that term is defined in U.S.C. (a)() and 0 C.F.R. (a) and continued to operate as a business until it decided to order a mass layoff or plant closing at the Facilities.. At all relevant times, Plaintiff and the other similarly situated former employees were employees of Defendant as that term is defined by U.S.C..

10 Main Document Page of 0. On or about February, 0, the Defendant ordered mass layoffs or plant closings at the Facilities, as that term is defined by U.S.C. l(a)(). 0. The mass layoffs or plant closings at the Facilities resulted in employment losses, as that term is defined by U.S.C. (a)() for at least fifty of Defendant s employees as well as % of Defendant s workforce at the Facilities, excluding part-time employees, as that term is defined by U.S.C. l0(a)().. The Plaintiff and the Class Members were terminated by Defendant without cause on their part, as part of or as the reasonably foreseeable consequence of the mass layoffs or plant closings ordered by Defendant at the Facilities.. The Plaintiff and the Class Members are affected employees of Defendant, within the meaning of U.S.C. l(a)().. Defendant was required by the WARN Act to give the Plaintiff and the Class Members at least 0 days advance written notice of their terminations.. Defendant failed to give the Plaintiff and the Class members written notice that complied with the requirements of the WARN Act.. The Plaintiff is, and each of the Class Members are, aggrieved employees of the Defendant as that term is defined in U.S.C. (a)().. Defendant failed to pay the Plaintiff and each of the Class Members their respective wages, salary, commissions, bonuses, accrued holiday pay and accrued vacation for 0 days following their respective terminations, and failed to make the pension and 0(k) contributions and provide employee benefits under ERISA, other than health insurance, for 0 days from and after the dates of their respective terminations.. Since the Plaintiff and each of the Class Members seek back pay and benefits attributable to a period of time after the filing of the Debtor s bankruptcy petition and which arose as the result of the Debtor s violation of federal laws, Plaintiff s and the Class Members claims against Defendant are entitled to first priority administrative expense status pursuant to U.S.C. 0(b)(l)(A) during that period in addition to priority status for their claims prior to the bankruptcy filing, or alternatively, full priority treatment under U.S.C. 0(a)() and ().

11 Main Document Page of 0. The relief sought in this proceeding is equitable in nature. California WARN Act Cause of Action. Plaintiff realleges and incorporates by reference all allegations in all proceeding paragraphs. 0. Plaintiff brings this claim on behalf of the other employees similarly situated who worked at Defendant s El Segundo, California Facility, and other covered establishments, are former employees, of Defendant as defined in Labor Code 00(h).. Defendant terminated Plaintiff s employment and the employment of other similarly situated employees, pursuant to a mass layoff, relocation or termination as defined in Labor Code 00 on or about February, 0 or thereafter.. Defendant was an employer as defined in Labor Code 00(b).. Defendant violated Labor Code 0 by ordering a mass layoff or termination in California without giving written notice at least 0 days before the order took effect to () the employees affected by the order and () the Employment Development Department, the local workforce investment board, and the chief elected official of each city and county government within which the mass layoff, relocation or termination occurred. The mass layoff, relocation or termination was not necessitated by a physical calamity or act of war.. As a result of Defendant s violation of Labor Code 0, Plaintiff and the other similarly situated employees are entitled to damages under Labor Code 0(a) in an amount to be determined.. Plaintiff has incurred and the other similarly situated employees will incur attorney s fees in prosecuting this claim and are entitled to an award of attorney s fees under Labor Code 0. / / / / / / / / /

12 Main Document Page of 0 CALIFORNIA WAGE PAYMENT PROVISIONS OF LABOR CODE Cal. Labor Code 0, 0 & 0 On Behalf of the California Named Plaintiff and California Rule Class. The Plaintiff and the California WARN Rule Class allege and incorporate by reference the allegations in the preceding paragraphs.. California Labor Code 0 and 0 require Defendants to pay its employees all wages due within the time specified by law. California Labor Code 0 provides that if an employer willfully fails to timely pay such wages, the employer must continue to pay the subject employees wages until the back wages are paid in full or an action is commenced, up to a maximum of thirty days of wages.. The Plaintiff and the California WARN Class who ceased employment with Defendants are entitled to unpaid compensation, but to date have not received such compensation. The Defendants did not pay the Plaintiff and California WARN Class their accrued paid time off prior to their termination. The Plaintiff and members of the California WARN Class are owed the paid time off they accrued prior to that date. PRAYER FOR RELIEF WHEREFORE, the Plaintiff, individually and on behalf of all other similarly situated persons, prays for the following relief as against Defendants, jointly and severally: A. Certification of this action as a class action; B. Designation of the Plaintiff as Class Representative; C. Appointment of the undersigned attorneys as Class Counsel; D. A first priority administrative expense claim against the Defendant pursuant to U.S.C. 0(b)()(A) in favor of the Plaintiff and the other similarly situated former employees equal to the sum of: their unpaid wages, salary, commissions, bonuses, accrued holiday pay, accrued vacation pay, pension and 0(k) contributions and other COBRA benefits, for 0 days, that would have been covered and paid under the then-applicable employee benefit plans had that coverage continued for that period, all determined in accordance with the WARN Act, U.S.C. (a)()(a) and the California Labor Code

13 Main Document Page of 0(a), (b); or, alternatively, determining that the first $, of the WARN Act claims of the Plaintiff and each of the other similarly situated former employees are entitled to priority status, under U.S.C. 0(a)(), and the remainder is a general unsecured claim; and E. An award and administrative priority claim against the Defendants in favor of the Plaintiff and the other similarly situated former employees equal to the sum of: their unpaid wages, salary, commissions, bonuses, accrued holiday pay, accrued vacation pay, pension and 0(k) contributions pursuant to Cal. Labor Code 0, 0 & 0; F. Such other and further relief as this Court may deem just and proper. 0 Dated: February, 0 BLAKELEY & BLAKELEY LLP By: /s/ Ronald A. Clifford Scott E. Blakeley Ronald A. Clifford Scott E. Blakeley Ronald A. Clifford Blakeley & Blakeley LLP Park Plaza, Suite 00 Irvine, CA Tel: () 0-0 Fax: () 0-0 Jack A. Raisner René S. Roupinian Outten & Golden LLP Park Avenue, th Floor New York, New York 0 Telephone: () jar@outtengolden.com rsr@outtengolden.com Attorneys for Plaintiff and the Putative Class